San Francisco and California Annuities Attorney: Annuities and Retirement Savings

ATTORNEY NEWSLETTER

The Dangers of Relying on Annuities as Retirement Savings

Recent studies by the Economic Policy Institute and other economic thinktanks reveal that Americans are increasingly at risk of retiring broke. Studies indicate that 42 percent of Americans have less than $10,000 tucked away for retirement. Retirement preparedness varies by age and not surprisingly younger families have less saved than older ones. What all this data suggests is that when you do develop – and save in – a retirement plan every nickel counts. Insurance agents tout annuities as a good savings vehicle but the San Francisco and California annuities attorneys at Evans Law Firm, Inc. advise caution.[1]

Our attorneys have seen disappointed retirement age policyholders lose money in annuities through rider fees, surrender charges, and other hidden costs. Annuities are complicated insurance policies with significant tax consequences, high sales commissions, fees that erode returns and withdrawal penalties. Since they are illiquid investments, any withdrawals exceeding normally 10% of an annuity’s value in any one year will likely trigger surrender penalties.

The California annuity and financial elder abuse attorneys at Evans Law Firm Inc. represent seniors who have suffered losses on annuity surrenders or other transactions or as the result of the operation of policy riders. If you or a loved one is over 60 and live in California and paid surrender charges on a full or partial surrender, or have paid rider fees, or other charges under an annuity policy, call Evans Law Firm today at (415)441-8669 and we can review your policy for free. We handle life insurance, annuity, and financial elder abuse cases throughout California. A list of major annuity providers and distributors in California appears below.

Historically, direct investments in the markets through tax-deferred IRAs and 401(k) plans offer retirement savings without the sales commissions, fees, and surrender penalties that come with annuities. Commissions and fees erode returns and growth is lost to hidden costs and charges. While early withdrawals from IRAs and 401(k) plans are subject to tax penalties, there are exceptions under the tax laws (college education, home purchases and medical emergencies, for example) and in any event the financial institution itself does not charge a penalty. With early withdrawals from annuities, policyholders pay surrender charges to the carrier and face tax liabilities to the government. You should always consult with your tax advisor regarding any purchase, withdrawal from, or replacement of, an annuity.

The bottom line is that annuities are an expensive retirement savings vehicle and may disappoint once the policies – and annual charges and actual returns – are analyzed. Direct market returns through tax-deferred IRAs and 401(k)s generally outstrip the returns on annuities and are much less complex. Also working for you is your Social Security benefit which is an inflation-adjusted creditworthy annuity far superior to anything offered in the marketplace. Working longer, even earning a part-time income, makes it easier to delay filing for Social Security benefits until age 70. Waiting will produce real returns of 4, 5 or even 6 percent a year for those living to age 90 and more. “Social Security is an awesome annuity,” as one industry expert put it.

Contact Us

If you are over 60 and surrendered an annuity in California or suffered loss on an annuity replacement or as the result of an annuity rider, contact California annuity attorney Ingrid Evans and the other annuity and financial elder abuse attorneys at the Evans Law Firm for a free review of your policy at (415) 441-8669, or by email at <a href=”mailto:info@evanslaw.com”>info@evanslaw.com</a>. Our attorneys have experience with complex indexed universal and whole life policies and annuity contracts and cases against large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement. We also handle cases involving physical and financial elder abuse, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

Some of the major annuity providers and distributors in California are listed below. We do not suggest in any way that any of these carriers or distributors has done anything wrong or issued an improper contract. Rather, the list is provided solely for our readers’ convenience.

Athene Annuity and Life Company

Aviva Life Insurance Company

AXA Equitable Life Insurance Company

Bankers Life Insurance and Casualty Company

Crump Life Insurance Services, Inc.

EquiTrust Life Insurance Company

Fidelity & Guaranty Life Insurance Company

Forethought Life Insurance Company/Global Atlantic Financial Group

Genworth Life Insurance Company

Global Atlantic Financial Group/Forethought Life Insurance Company

Guardian Life Insurance Company

Guggenheim Partners/Security Benefit Life Insurance Company

ING USA Annuity and Life Insurance Company

Jackson National Life Insurance Company

John Hancock Life Insurance Company

Life Insurance of the SouthWest/National Life Group

Lincoln Financial Group/The Lincoln National Life Insurance Company

MassMutual/Massachusetts Mutual Life Insurance Company

MetLife/Metropolitan Life Insurance Company

Midland National Life Insurance Company

Mutual of Omaha/United of Omaha Life Insurance Company

National Life Group/Life Insurance of the SouthWest

New York Life Insurance Company

Northwestern Mutual Life Insurance Company

Pacific Life Insurance Company

Principal Life Insurance Company

Pruco/Prudential Life Insurance Company

RiverSource Life Insurance Company/Ameriprise Financial

Security Benefit Life Insurance Company/Guggenheim Partners

Symetra Life Insurance Company

Transamerica Life Insurance Company

United of Omaha Life Insurance Company/Mutual of Omaha

Unum Life Insurance Company of America

Voya/Reliastar Life Insurance Company

World Financial Group Insurance Agency, Inc./Athene Annuity and Life Company

[1] While we do not provide tax or investment advice at Evans Law Firm, we do represent policyholders who have suffered losses on annuity transactions, including tax losses.

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